Guest Post by Megan M. La Belle, Catholic University Columbus School of Law
Professor La Belle attended the oral argument in Microsoft v. i4i Limited Partnership this morning and was kind enough to prepare this summary for Patently-O.
Today, the United States Supreme Court heard oral argument in Microsoft Corporation v. i4i Limited Partnership, in which Microsoft has challenged the Federal Circuit’s clear and convincing evidence standard for overcoming the presumption of patent validity set forth in 35 U.S.C. § 282. The argument was held before a full courtroom, with former Deputy Solicitor General Thomas G. Hungar representing Microsoft, former Solicitor General Seth P. Waxman representing i4i, and Deputy Solicitor General Malcolm Stuart arguing as amicus curiae on behalf of the United States in support of i4i.
Mr. Hungar began his argument by referring to the Court’s statement in KSR Int’l Co. v. Teleflex, Inc. that the presumption of validity “seems much diminished” where, as here, the prior art was not considered by the U.S. Patent & Trademark Office. Justice Scalia quickly responded, asking whether Microsoft was arguing that a preponderance of the evidence standard should apply across the board, or only when the prior art was not considered by the USPTO. Mr. Hungar explained that Microsoft’s position is that the more relaxed standard should apply in all cases where patent validity is challenged.
The Justices then asked a series of questions about the state of the law and congressional intent in 1952 when § 282 was enacted, since the statute itself is silent as to the evidentiary standard. The Court focused on Radio Corporation of America (RCA) v. Radio Eng’g Labs., Inc., 293 U.S. 1 (1934), in which Justice Cardozo made some broad statements about the presumption of patent validity, including that the challenger “bears a heavy burden of persuasion” and that the presumption cannot be overcome “except by clear and cogent evidence.” Relying on RCA, i4i argued that Congress intended to codify the existing presumption of patent validity when it enacted § 282, and therefore clear and convincing evidence is the correct standard. Microsoft countered that the law regarding the presumption of validity was “all over the map” in 1952, and that some courts did not recognize any presumption of validity, much less a presumption that could only be overcome by clear and convincing evidence. Microsoft further argued that the quoted language from RCA was mere dicta, and that the case was distinguishable because RCA involved a question of priority of invention, not validity.
In addition to arguing that Congress intended to codify the clear and convincing standard, counsel for both i4i and the United States emphasized Congress’s acquiescence in that standard over the years. They contended that Congress is well aware of the Federal Circuit’s clear and convincing standard, and that Congress has been very active in the patent arena both in the past and in the present. Yet, despite its many other proposals to reform the patent system, Congress has made no attempt to change the long-standing evidentiary standard for overcoming a presumption of validity.
Some Justices inquired about solutions other than altering the evidentiary standard. Justices Breyer and Sotomayor wondered if perhaps the issues raised by this case could be addressed with careful jury instructions. Justice Sotomayor suggested, for example, that a jury could be instructed that the burden of proof to overcome the presumption of validity is clear and convincing evidence, but that the challenger’s burden is more easily satisfied with respect to evidence of prior art that was not considered by the USPTO. Microsoft responded that such a jury instruction could be confusing for the jury, as the Federal Circuit held in an earlier case between Microsoft and z4 Technologies.
Finally, the Court returned to the question as to why the presumption of validity should apply when the prior art was not considered by the USPTO. In response to Justice Ginsburg’s request to justify such a rule, Mr. Waxman offered four reasons. First, a validity challenge is a “collateral attack” on a governmental decision to issue a patent. Second, if a patent is erroneously invalidated, the harm to the patent owner is significant because of the preclusive effect such a determination has under Blonder Tongue v. University of Illinois, 402 U.S. 313 (1971). Third, i4i argued that such a presumption is warranted because patent owners, investors, and licensees rely on patents once they are issued. Finally, i4i claimed that it is “far from black and white what the PTO does or doesn’t consider,” and that rejecting the long-standing clear and convincing standard would marginalize the agency. In response, Justice Breyer stated that i4i’s reasons “are all along the lines of how important patents are and what a disaster [it is when] patents are invalidated.” Justice Breyer then commented that, in today’s world, perhaps a “worse disaster for the country is to have protection given to things that don’t deserve it….”
The Court is expected to issue its decision before the end of June 2011. Chief Justice Roberts recused himself, so the case will be decided by the remaining eight justices.
Megan M. La Belle is an assistant professor at the Catholic University of America, Columbus School of Law, where she teaches and researches in the area of intellectual property law and procedure. Her article "Patent Litigation, Personal Jurisdiction, and the Public Good" recently appeared in the George Mason Law Review.
Update: A copy of the rough transcript can now be downloaded here: Download Microsofti4iOralArgument
It looks to me like i4i’s got the upper hand in this patent litigation, and not only because of the U.S. arguing as amicus on its behalf. I’ve always thought i4i had the better arguments, not to mention the legal precedent and reliance issues on its side.
One of the problems I see here is allowing previous art considered as a reason for invalidation is due to the potential of file insertion at the Uspto.Did microsoft raise this initally or later. The other problem is I was the conciever with bill gates of the item in question and others theres telephone conversations both ways in the time period. The other issue is did bill file and if so inventorship dispute potential has not been considered. Likley this company did the development question is was there any thing unique accomplished or are they looking for a chunk of change that should be mine.
Me quoting me:
“by the by – still no intelligent response.”
Now I know what must be going through the good readers’ heads – What baseless comment will wtvlfdt come up with? Why dont wtvlfdt just write something O substance?
What is the advice of wtvlfdt if the Court come back with C&C only for art “considered” by the Office?
lolz – the one thorin around improper behavior children is the one callin someone else creepy
Project much?
by the by – still no intelligent response.
You’re even creepier than 6.
Like I done said – no intelligent response…
I guess it’s better that you’re stalking me on this site than your usual creepy hanging around the elementary school playgrounds.
But I’m really not your type. I don’t think anybody’s your type. Probably why you’re here days letter begging for people to respond to you.
Maybe you should try match.com or something. Or did they screen you out?
by the by – chowder will not post anything remotely intelligent in response here.
1,000 points for the best answer why (Iza already know, but Homey dont do answers).
Well well well – chowder done do his usual disappearin act.
“Cmon chowder, or is this yet another instance where ya simply dont provide anything O substance? (as typical for you)”
Iza just curious (and really dont mind ya providing the chuckles), but why exactly do you post?
“6, FYI, when there is a trust relationship, confidential relationship or a contractual relation, one can be liable for misappropriation of an idea.”
Still not stealing.
And under which lawls does this “trust relationship” or “confidential relationship” stuff arise from other than in a client/attorney relationship?
“”.edu?” so, by expanding, it Facebook has lost its allure?”
In many ways yes, especially to the first adopters. This has been widely reported on it isn’t some big secrit. But to give you an example irl, my aunt wants to be my friend on facebook. Still haven’t approved her a year later although I went ahead and made the decision to keep everything clean on there so I can friend my entire family since they all started popping up. So I went ahead and friended most other old people I just still haven’t her. Before that it was anything goes on there with a bunch of young people I knew and not where every corporate arsehat could check up on you. For go d’s sakes, you have people at work getting friend requests from their boss.
6, FYI, when there is a trust relationship, confidential relationship or a contractual relation, one can be liable for misappropriation of an idea.
With this in mind, go see the Social Network one more time and observe what happened and see whether Mark Z. had such a relationship with the twins.
“.edu?” so, by expanding, it Facebook has lost its allure?
Lolz atcha there ya pompASS one.
Pray tell what be the “competent” path if the Court comes back with the heightened standard ONLY for those references “considered” (as that term is currently understood)?
A for your comment in error – my action plan is decidely not “regardless of what SCOTUS decides“. Where on this earth would you get such an idea? Are you fully diving into the Med trading program of certain posters here? Thoughthis does fit into your rather pompASS ASSumptions of whether or not I practice compentently (still very much unwarranted, I add).
Cmon chowder, or is this yet another instance where ya simply dont provide anything O substance? (as typical for you)
This is an important topic. Your rantings on this topic are not important.
We already know that your plan is to file 1,000’s of references in an IDS regardless of what SCOTUS decides.
The rest of us competent practitioners will continue to practice competently.
ohhh, so you’re a communist. You realize that’s a political monopoly too, right?
Again, eliminating the patents system is pro-monopoly. The little players don’t get a foot in the door with MS and IBM without them.
It’s amazing that your’e that blind. You need to get off of whatever you’re reading and do some business case studies. A little perspective would make you a lot smarter.
Lolz – the what me worry kid chimes in.
No surprise that “competency” means ignoring reality from wtvlfdt.
Or is this thread also not appropriate to discuss the subject here (maybe “more important” stuff should be under discussion…)
“Unfortunately there has been a long history of over-reaction to routine and relatively unimportant events.”
I would think that by now you’d be used to the “the sky is falling!!!! run for your lives!!!!” cries of the chicken little crowd here at Patently-O.
Regardless of what SCOTUS actually rules, or says, you’re going to here those cries here from the usual suspects. The competent among us will, as you suggest Paul, keep calm and carry on.
More straw and platitudes Paulie – Ya havent addressed my specific points here and ya still be wrong in your understanding O business and “Value“.
Ignoring reality just aint the same as explaining reality straightforwardly and objectively.
It alwasy be bad advice to ignore reality.
Ronnie K,
The conflation is on purpose – that just be Maxi’s style.
“societies would necessarily reap net benefits by abolishing patents altogether”
Ah yes, now here be the mantra of the anti-software patent people – (the NIMBY’s just aint realized this yet – as I point out ta 6, patent law aint segregated that way).
“software authors”
absolutely clueless (and still tryin to make friends over at slashdot).
6,
just an observation – the reference to grown up arts and kiddie arts dont work for Sunshine (the law just aint segregated by art field).
It dont work for you either.
Taking something that dont work for someone else and sharin those Meds aint a good idea.
Above, a long way above, Ron Katznelson invites me to write how Europe balances the error of revoking a good claim with the error of upholding a bad claim. I am not an economist and I have not read the tutorial by Justice Harlan, and my practice is not serving garage inventors or start-up companies. What I do is serve manufacturers. A patent portfolio of their own is vital. Clearance from the patents of their competitors is even more vital. I’m interested in the positive effect of innovation on gainful employment, the more employees the better.
Ron seems to think that C+C for proving invalidity is justified because revoking a valid claim does more harm to society than upholding a bad claim. Based on my client base, I happen to think the opposite. Bad patents are a restrint on innovation and employment.
It is my perception that C+C in patent litigation in the USA is needed, primarily to circumvent revocation on the spin of a coin. I can only say, come to the EPO, or Germany, The Netherlands or the UK, sit through some revocation actions, and ask yourself whether application of a preponderance standard is nothing more than the spin of a coin.
Ron, we do (of course) have a presumption of validity. The burden of proving invalidity rests with the petitioner. Likewise, the burden of proving infringement rests with the petitioner.
Unfortunately there has been a long history of over-reaction to routine and relatively unimportant events.
KSR provides an excellent example. The law relating to obviousness has not changed much over the past 200 years, and is similar in its essentials in the US, the UK and the EPO Appeal Boards. It is extraordinary how much agreement there is on particular issues over that span of time and in the various national jurisdictions. Recently the EPO Enlarged Appeal Board cited the Red Dove case in Germany to show that essentially the same standards apply in German national law. In KSR the Supremes repeated a number of points of black-letter law and observed that the law ought to be applied with flexibility and common sense.
What was the reaction? From the profession, the earth had fallen in. From the USPTO an instant re-writing of the rule book to take account of the well-known platitudes restated in KSR, coupled with an instant and catastrophic fall-off in the allowance rate. The question arises: if the rule book had to be re-written to require the use of common sense in examination, what were the examiners doing before? And all this from a decision of a court that knew well that it was not expert in IP law and was concerned to adhere to established principles and make a conservative and minimalist decision.
As a profession it is our duty to explain reality straightforwardly and objectively and not promote groundless fear and concern. The damages that can arise from unfounded perceptions can be enormous and disproportionate. The 1940 poster that was fortunately never needed said: “Keep calm and carry on.” Not bad advice, really.
MaxDrei,
Apparently, you have no clue as to how standards of proof are set in American law. Focus on adjudication errors only. Read Justice Harlan’s tutorial; it would help you understand our system. You will understand that it is the risk of errors to the litigants that counts – not some indeterminate harm due to “toxic combination of unwarranted uncontrolled unrestrained patent monopolies.” Focus on errors on both sides Max. How would you compare the harm you identify with that of making errors that invalidate perfectly good patents? Errors are always made. If errors of upholding bad patents are more harmful to society than errors of invalidating perfectly good patents, societies would necessarily reap net benefits by abolishing patents altogether. Why do we not see such systems? Some people in your neck of the woods (Netherland) thought so in 1869 only to realize they were wrong, restoring the patent law in 1912. Does this give you a clue Max?
BTW Max, since you know about European patent law, do you know what British patent law holds regarding the burden of proof for invalidating patents? Perhaps you think it is gobbledegook also? Please enlighten us how German law works when it comes to a presumption of validity, but please do not conflate the legal standards with patent office examination quality.
“The reality is that KSR has resulted in a requiremetn for either unexpeted results (i.e., a dicovery) or a new element or combination of elements that could not have been achieved by a PHOSITA at the time the invention was made (i.e., extraordinary skill AKA flash of genius)”
Only in the kiddie arts. :( Sorry for those folks.
Just fyi Ned you cannot “take” an “idea”. Ideas are immaterial. Until you can start to use proper terminology to describe what you are talking about you will never understand what is under discussion.
“knowing that it was patented by i4i”
Well if they knew without a shadow of a doubt that i4i patented an idea then they know that such a patent is invalid under 101 and should not give infringing it even a bit of pause.
“When Microsoft did that, it made no difference whether i4i had a better product or not. I can only hope that you can understand why this is true.”
Orly? So if i4i had a product better than word then you believe that it would not have made a difference? Somehow, based strictly on the sales of word, I doubt that. Unless, of course, i4i is as incompetent business wise as I have already alleged. Which, if you believe this to be true, then thanks for supporting my position.
“An essential purpose of the patent system is to protect inventors ”
Yeah I know, not software authors. Shame isn’t it that MS wouldn’t go ahead and pull the plug on the whole thing. Several million dollars and it still isn’t worth it to them to end the charade.
“An essential purpose of the patent system is to protect inventors developing new products from their competitors doing exactly this.”
Presuming that you were simply mistaken about what i4i is, and thought them an inventor rather than a simple software author, I would agree with you. But since that blatantly isn’t the case here idk what you’re trying to get at.
“To call the intended beneficiary of the patent system a troll is, to put it mildly, a travesty to the extent that a patent system is both good in concept, and authorized by the law.”
You said it yourself Ned, the intended beneficiary is inventors, not software authors.
“I suppose you saw The Social Network and sided entirely with Mark Zurkerberg on the basis that he was a better programmer than the Winklevosses.”
Actually I saw only the first 30 min or so of it before I went to see a movie I thought I’d like better. I don’t really recall having “sided” with anyone in that dispute they were having. I think the one guy, zuckerman and his partnerdude that gave him some money to help get the thing off the ground made the company. The Winkletards, so far as I could see (in the movie and irl) did not even try to file any bogus software patents and certainly there was no copyright issues that I could tell were on display. Therefore, I side with nobody as there is no legal issue. The winkletards are just some whiny nobodies that couldn’t get their site to grow like hundreds of others that tried and who have apparently persuaded zman to give them some money out of his big ol’ heart.
Keep in mind Ned, facebook was not the first site of its kind. It took off precisely because it was tightly controlled to the college atmosphere (had to have a .edu email to use it) and established a huge base because, gasp, WOMEN would use it en masse because it wasn’t filled with gimmicks and tomfoolery like hot or not or friendster etc. It allowed itself to grow to huge proportions before implementing the nonsense that you see on there today. Also it had a catchy name. I have first hand knowledge, I was there in the formative years. I was much more impressed with the old school facebook than the new school facebook. I probably wouldn’t even join now. Many people I know deleted their facebook account out of disgust when the new shinanigans first started.
Facebook is in a bit of a bind, it needs to get more gimicky in order to grow and prosper, but it draws and keeps people because they like what they signed up for. The newer generation is somewhat ruining it through liking just nonsensical sht they “ugrade” facebook with. That’s right, you heard me, GT FO my lawn you stu pid kids!
But like I said, I never saw the whole movie. All I know is that, at least fictionally, two more nerds got some haw t as s. And that’s cool, because there were plenty that didn’t get any in my school, and I didn’t get nearly enough. I totally should have been a business major. Good go d it is so easy meeting and picking up girls in classes that aren’t so technical that there are only 3 girls TOPS in the whole class.
Mooney knows a little to much about Internet “pronography” and fluffing…
“I have a feeling that in the real world patentees and licensees will continue to negotiate”
Nice straw there Paulie.
But a big “so what?” to your feeling. It don’t change the topic under discussion and sure as shht dont change your flagrant error concerning the reality of perceptions and the impact to “Value.”
Everything I posted above still holds true.
Now you add to your fallacy with “On the whole, the good patents do not come before the courts”
Wake up son.
As for “It is best not to get too excited” – yeah I noticed your membership pin in teh “What, me worry?” club. But for the rest O us that still deal with real world clients and their real world concerns, we need to stay on our toes.
Ping
I have a feeling that in the real world patentees and licensees will continue to negotiate. They will figure out the practical and commercial value of the patented technology. Licensees will perform due dilligence and if there are weaknesses in the patent, then this will be pointed out. Then they will sit down and work out a royalty rate. The presumption of validity may come into this, but I suspect not so much.
Law in the US is given great respect. On the whole, the good patents do not come before the courts, and for that reason their practical commercial significance will remain unafected. On the whole, the patents which are litigated fall into the KSR/Bilski category (why was this ever litigated?) and if the judges are not alert to this they may gain a false impression of how the patented system really works. But innovative patentees and their licensees/customers will see things much as before. Life will go on. Post-KSR the USPTO continues to grant patents. It is best not to get too excited.
“CAFC are the ones who ought to be helping the honest burghers of the jury, with an Approach that manages obviousness in an orderly way.”
Um they do – it be called C&C.
Maxi,
Conflate much?
Why ya be bringing the C&C into the examiner’s realm? No one even suggested such.
As for “PTO Examiners are more competent“, let me pointcha to the amici briefs and the oral arguments, which done lifted my observations from this here mere blog comment sections. Look for such keywords and phrases as agency deference, expert opinion, reason for the Office and the like.
Geesh, do I really gotta hold your hand on this stuff?
As for “very few issued patents that get litigated have their validity tested to a higher standard of competence“, ya really be sounding like Dim and his call for a registration only system (if the Office work be so discounted, it aint worth the Biiillions – pinkie to corner of mouth – that we be spending on it).
Just an observation.
Ned, every time you post just at the moment, you astound me. Now you write:
“virtually every patent is obvious without the C & C standard”
to which I say that it is unconscionable of posters here to tell me that the capital of hindsight land is the EPO, because of its Problem and Solution Approach to the examination of obviousness. Why, EPO-PSA is so simple, even a jury could get the hang of it, after a few minutes of tuition, and then they would be finding claims not invalid (on the preponderance) at least as often as they find them obvious. Not sure about SCOTUS or the CAFC though. And yet SCOTUS and the CAFC are the ones who ought to be helping the honest burghers of the jury, with an Approach that manages obviousness in an orderly way.
Experience, Max, with juries and judges has shown that virtually every patent is obvious without the C & C standard. It got to be a really sick joke at the time. The 8th Circuit, for example, had a very bad reputation.
MS wants us to return to that era — because it appears not only to have no interest in a patent system, in fact, it seems hostile to the whole concept.
Ned just wrote “the clear and convincing standard is one of the most important bulwarks against holding patents invalid based upon whim and coin tosses”.
Does that mean that PTO Examiners are striking down worthy applications on a whim or the toss of a coin? Should they also be stopped from issuing objections unless they have C+C basis?
Or does it mean that PTO Examiners are more competent to examine obviousness than those who examine obviousness when an issued patent gets litigated? Shouldn’t it be the other way around, that the very few issued patents that get litigated have their validity tested to a higher standard of competence than every one of the million apps in the PTO?
Careful there Ned-O-gram,
Ya run the risk of saying something like “A strong patent system is better than a weak patent system” and thus might be labelled “fluffy” by Sunshine.
O course, no one has yet ta provide a reasonable argument that a weak patent system be preferable (aside from the cra_zy anti-patent folks, which by definition aint reasonable).
Dittos.
Once upon a time in the United States, the patent system was foundering because of an unrealistically low standard for obviousness that was being employed by the courts, primarily in certain circuits. Forum shopping was rampant.
The resulting decline in investment in new R&D and startups was palpable. Congress decided to act because it needed to. It created the Federal Circuit not only to stop form shopping, but to strengthen the patent system by keeping patent cases away from the crazier circuits.
This case recalls some of those crazier cases that spoke of reducing or eliminating the presumption of validity when prior art was not before the patent office. As a result, the patent system did not function in the crazy circuits.
What we have here today is a case that is actually very important because history has told us that the clear and convincing standard is one of the most important bulwarks against holding patents invalid based upon whim and coin tosses. We can expect that if Microsoft wins his case, the patent system will have suffered severely.
“That said, the most vital patents are those that protect drugs.”
Lolz Ned, dontcha know that the most vital patent be the one immediately infront of ya that be your client’s? No matta the subject, that be the “most vital” one.
Max, the American patent attorney you were dealing with was not being honest either with himself or with this client.
As to the insane world of banksters, you might actually be surprised that some of them, perhaps the ones that actually make money, actually inquire as the new the validity (and scope) of the patents protecting a new product before they invest.
That said, the most vital patents are those that protect drugs. If one of these patents were invalidated by an European opposition, I can fully understand the dismay of the inside counsel.
Paul,
You seriously misunderstand the reality of business.
“The value of patents will not suddenly and severely be reduced whatever decision the Supremes make”
WRONG.
“Value” is not a hard or constant thing. “Value” is intricately tied to perception and your wanting to make it a purely “objective reality” thingiee is in fact quite unrealistic.
Your characterization of the actual reality as “scaremongering” is simply based on your false premise of “value” as divorced from the true understanding of that term in a business sense.
In essence, your view would hold that there should be no such thing as market crashes because they are “irrational.” Sorry, but reality is “irrational” in this regard and it is you that be divorced from reality here.
Just telling it to ya all honestly and straightforwardly like.
6, I think you have a basic misunderstanding of what the patent system is all about. i4i did not fail because Microsoft wrote better code, but because Microsoft took the idea, knowing that it was patented by i4i, and incorporated it into Microsoft Word. When Microsoft did that, it made no difference whether i4i had a better product or not. I can only hope that you can understand why this is true.
An essential purpose of the patent system is to protect inventors developing new products from their competitors doing exactly this. To call the intended beneficiary of the patent system a troll is, to put it mildly, a travesty to the extent that a patent system is both good in concept, and authorized by the law.
I suppose you saw The Social Network and sided entirely with Mark Zurkerberg on the basis that he was a better programmer than the Winklevosses.
EG makes an interesting point.
However, one of the major themes in Michael Chrichton’s excellent novel Airframe is the disconnect between objective reality and the perceptions of the media. Since he wrote his novel, the disconnect has if anything become even more severe.
As attorneys it is our job to deal with objective reality and tell it honnestly and straightforwardly to those concerned, including those in the finance world. The value of patents will not suddenly and severely be reduced whatever decision the Supremes make, and they will neither be much easier nor much more difficult to enforce than before. Scaremongering may be a tool for bringing in work, but it should not be resorted to. As Lincoln memorably said: “There will still be business enough.”
Max, my experience is that Examiners are ignoring secondary considerations. No evidence regarding them seems to be good enough for overcoming the rejections without appealing. I’m not sure about the BPAI. As for the CAFC, go read the recent Tokai decision, and tell me how much good their evidence of commercial success and copying by others did them. Also recognize that at least one claim elements was entirely absent from the prior art, but the CAFC said it was still obvious because the results were predictable and it was within the skill of a PHOSITA to create it. The reality is that KSR has resulted in a requiremetn for either unexpeted results (i.e., a dicovery) or a new element or combination of elements that could not have been achieved by a PHOSITA at the time the invention was made (i.e., extraordinary skill AKA flash of genius). That is an extremely difficult burden to carry in the predictable arts, resulting in many, probably most, applicants at least narrowing the claims much more than should be necessary to obtain allowance (i.e., worthy patents not being granted).
“they demonstrate a lesser species within the genus. The beaten company who now no longer has any business because another company wrote a few lines of code suing in order to… um, supposedly rebuild their once great empire of 100 employees which it apparently took to write cra ppy code.”
Utterly clueless.
The tinge of a wannabe rejected by the folks at slashdot despearately wanting ta belong to some posse.
The clattering of hooves echo in the air.
Max,
I won’t argue with you that the world of finance (e.g., banks and stock market) can be “insane” at times. But the U.S. has some fairly stringent securities laws that can cause trouble if the value of a significant asset changes (for example, as a result of a court decision), but isn’t duly noted as such in the company’s year end report. We went through a particularly trying time back during the Y2K scare where failure to account for potential Y2K issues might be considered a securities law problem.
Again, my point is about the impact of the perception, not the reality. And perception often rules the world of finance (e.g., stock market) on assets (like patents) that the finance world really doesn’t understand what the law (standard for patent validity) really means and only sees that the standard has been diminished, thus, by implication, diminishing the value of the asset associated with that diminished standard.
Well Ned, ordinarily i4i would get a pass as not being a true troll, but they demonstrate a lesser species within the genus. The beaten company who now no longer has any business because another company wrote a few lines of code suing in order to… um, supposedly rebuild their once great empire of 100 employees which it apparently took to write cra ppy code. Mhmmm. Right. Newsflash, if anyone wanted to buy their softwares then they’d still be in business. But nobody does, because a. their softwares were inferior to another product and b. because they don’t know how to make a softwares business in this day and age. In other words they’re suing MS on a patent that most corps would simply try to invalidate as being a software patent, except MS loves software patents so they won’t raise the issue, so that they can have another bite at the business apple they just got through failing at.
Sure that isn’t the worst species of troll out there, but a troll’s a troll’s a troll.
Maxi – you assume the premise you need to prove in your “to something more like their real value“.
Nowhere is this ASSumption supported or warranted.
Reminds me, EG, of the reaction of a US patent attorney to a patent belonging to his company getting revoked by an EPO Board of Appeal, at the end of opposition proceedings. Dannnitt, he said, don’t these judges realise that that patent was an important asset of the company? For him, that was the conclusive and unassailable argument, whether or not the patent should survive the assault on its validity.
For me it was a glimpse into an insane world of the banksters, who can put a price on anything but have no idea what in the world is of value.
If patent portfolios are re-valued, to something more like their real value, EG, so what? Is that not to be welcomed, as a healthy shift towards reality?
The issue of what the standard is for patent validity goes beyond litigation. In particular, the business community considers patents to be assets. If you tell the business community that the standard for invalidating patents has been lowered, the perception is that the value of the asset (the patent) has also been lowered. That perception can affect, for example, due diligence statements, year end reports, and certainly the stock market value of the business that owns those patents, to name a few. Again, the perception carried by a change in the validity standard may be the most significant impact of this decision. Unfortunately, that impact usually doesn’t get into the SCOTUS decision equation.
“Patents are a legacy system that barely has meaning today ”
lolz atcha – slashdot much?
I can think of 280 MIIILLION (with pinke in mouth) reasons why this decision aint no storm in a tea cup.
What the sam hill are you talking about?
Med Check!
Justice Breyer mischaracterized the situation as if lowering the bar would only affect a subset of patents that would be invalidated with the lower bar. It is dunder head thinking at its best, which is often the case with J. Breyer. (He should have gone into the personal grooming care profession.)
But Paul, I had thought the whole point was the jury instructions.
In “the real world” of real jury members, what is the difference between “Find invalid only if you are clear and convinced” and “Find invalid as soon as you think it more likely than not”. In how many cases do you think that would make “a material difference”?
I say when the USPTO screws up, and then hides it by keeping the first Patent that is pending an Application, and then denies the second because the first one that could have been corrected wasn’t because of the players. Then I say the USPTO can not have my Cake and eat it too.
And this is for those that tried to hide that fact, with the changing of the next. And therefore claiming it too was defective, by making it so.
Although an interesting point of law, it is arguable that this is a storm in a tea cup.
How many important precedental decisions on inventive step have turned on standard of proof? Graham v John Deere? Pavement Salvage? Sakraida? KSR?
On what other issues would standard of proof make a material difference in the real world where plaintiffs assert patents and defendants assert invalidity or unenforceability?
Proof is proof, and it is either there in the evidence or it is not. It is a matter of rigour and attention to detail. Standard of proof is occasionally important, but it is usually a secondary issue.
pingaling those typically conversant with software patents actually know both teh law and teh tech
Right. All that really really technical stuff that comes up during examination of software patents, like “the prior art wasn’t capable of compiling demographic data about users.”
Maybe it has something to do with the widespread availability of Internet pron.
bja, I think we’d need to have a bit of a conversation as to just how “pro-monopoly” I am. If you think that I support MS being as big as it is, you’d be wrong. I think that they are very business savvy and that is why they are where they are. To be clear, there are FREE software solutions to a huge number of things that MS provides software for, and yet, people still pay for MS’s products. I actually just paid 100$ for another copy of vista just yesterday. It is their business savvy that keeps them in business and where they are. Like billie bill said, you could drop him off in Mexico naked and striped of his previous identity wait 10 years he’d be back on top again.
There are a great many things in our corrupt system of lawls that allow these kind of corporate giants to exist and I disagree strongly with those provisions. I also do not think that relying on patents to magically solve our business problems that are really issues with other parts of lawl is a mistake. Patents are a legacy system that barely has meaning today and is long overdue for SUBSTANTIAL reformation, to the point probably of practically blowing it up and starting anew, but these are issues way outside of patent law as it is written which we discuss around here.
And before your retar ded mind takes my comments the wrong way let me tell you explicitly that I am not against patents in general, and indeed endorse them, even if I do think that they’re hopelessly broken to serve us decently in the coming age.
“yet a lowering of the standard would effectively force such a requirement.‘
Hence yet another O my observations – the (huge) drive for ultra bloat IDS submissions.
As the Office is required ta review IDS submissions, if for nothin else to check off as “considered,” and given a minute to checkoff a single form, a submission of a mere 1000 pages O references would suck up the current approx evaluation time of 17 hours – and that’s just checkmarking forms.
If this decision goes the way of only C&C for references “considered”, I be the first to be drivin massive trucks O IDS forms to the Office in order to protect my client’s current expectations O protection come litigation.
No wonder the very government itself sought to make a powerful argument against what Micro$oft wants.
Just an observation (and an action plan – all kind of civil obedient and all).
Big D – ya gotta fix the software here – both maxi and my posts were clipped.
IF, by astute, you mean flippant, then, yes…
“Because lowering the standard would open a floodgate of endless challenges based on “new art” (art not considered by the PTO) of which there is never any shortage… and would, as i4i and DOJ aptly put it, “diminsh the role of the PTO”, e.g. in sifting through the sea of cumulative art to find and apply the “best available art”. There is not requirement for the PTO to find and apply “all the available art” yet a lowering of the standard would effectively force such a requirement.
Some folks just don’t get it.
My guess is Ping defines bias as “anyone that disagrees with me.”
My take on the whole thing is, Microsoft is on the right side of this issue, even if for the wrong reasons.
This all ties back to the Bilski decision, in my opinion, and the sooner the standard goes back to “preponderance” where it should have been all along, the better for all of us currently suffering with should-be-invalid software patents, that patent abstract ideas and get it through the PTO just by virtue of putting the words “a computer device” or similar somewhere in the application. We need to be able to negate these bad patents without the bias against the plaintiff of “clear and convincing.”
Now I’m disappointed. I was anticipating a much better story.
Sorry about the missing text above. What I typed, and what I thought was still there when I clicked on Send, was “The internet” (rather than “I”).
Cy, I agree with you. What actually got sent is indeed fascinating, even bizarre.
“The best rejoinder is that Congress has recognized the problem of invalid patents and has moved to fix the problem”
Thank Ned-o-gram – this be just one O my observations re the fact that Congress sought ta provide a fix that required inherently only those things that meet the C&C level.
“Renee, you are wrong in the area of software”
corrected.
Geesh – ya let one anti-software-patent-nik around and they breed like flies.
Tell me Renee, do ya understand that those typically conversant with software patents actually know both teh law and teh tech? How much “law” do you really know?
Thought so.
Obviously invalid is one thing, but potentially invalid is another. Most patents in litigation fall are at least in the second category. However, the very existence of obviously invalid patent claims means that the PTO sometimes gets it very very wrong. The question is what do with that. I agree that the PTO should have more funding, but we don’t have a time machine to fix the ones that are already out there.
I get that licensees will be more reluctant to obtain patent licenses for questionable patents. The issue is whether or not this is bad thing. Should it be easy to license questionable patents?
You are correct that moving the standard will lower the monetary value of ALL patents. Lowering the standard of proof means that ALL patents are closer to the line separating valid patents from invalid patents. Since validity is one component of a patent’s monetary value, one would expect a decrease.
I get the concept, but what is your point? If patents are currently overvalued, then it makes sense to lower the standard. If patents are currently undervalued, then it makes sense to raise the standard. The real issue is whether or not lowering the standard is a bad thing. This is one of the collateral issues before the Supreme Court. Because reasonable minds disagree, Justice Breyer’s question doesn’t merit ridicule.
Renee, you might be right in the area of software. But we are dealing with the patent system as a whole here.
If there is a particular problem with software patents, let’s deal with them in isolation. For example, we have already granted prior user rights in the area of business method patents. Perhaps we should consider the same remedy with respect to software until and unless the PTO figures out how to properly examine them.
Excellent comment Ron. I also thought Waxman’s comments on the reliance interests of patents very persuasive.
Breyer’s point is also valid, though, and needs to be addressed and discussed seriously. The best rejoinder is that Congress has recognized the problem of invalid patents and has moved to fix the problem by enacting involuntary post-grant examination procedures to deal with them.
Changing the standard of proof to deal with patents that should not have been granted, however, is a blunt tool where a more precise instrument is needed. A change in the standard of proof will seriously lessen the reliability of patents, which the both the Constitution and Congress have deemed important to America.
No. Bad patents are not easily invalidated and, at least in the field of software, almost all patents currently granted are invalid. Anyone who understands software laughs when reading typical software patents. Software patents exist only because the people who make decisions about what should and should not be patented are ignorant about software, as are essentially all judges and so-called “IP” lawyers.
Most people consider pro-business to mean pro-competition. You’re pro-monopoly. There is a difference.
Hey hey hey bad joke, I consider myself quite pro-business. Indeed, perhaps too much so.
lulz I just like to pick on women in the patent field, hahahahahaha D removed my comment lolololol.
I’m not sure what you mean. If you mean your attorney failed to respond to the PTO, you can file a petition for unintentional abandonment, and if the gap was less than 2 years, you should expect to see your patent application revived (longer than that and you will have to provide some evidence). Filing a complaint against the attorney will not get your patent application restored, although you can also do that. If you meant something else, then you will have to ask it more clearly.
Watch out for those nihilists, ping.
“Kinsella immediately jumps to mind”
LOLOLOLOL.
I thought ya said impeccable? Kinsella be one hugely discredited hack.
No wonder ya cant see straight Pro Se.
I would not exist today, if there had been software patents back then.
I’m fascinated to learn that you would not exist, Max, had there been software patents back then. Could you elaborate? And back when, exactly?
The word gobbledegook comes to mind, Ron. Outweighing all your asymmetry ideas is the social harm done by the toxic combination of unwarranted uncontrolled unrestrained patent monopolies, a presumption of validity set at the C+C standard, and incompetent patent litigation. Shutting the stable door now, with a reject, reject, reject mentality at the PTO, is only compounding the mischief.
I like this blog. I would not exist today, if there had been software patents back then.
How do you define bias Ping?
I was not vouching for MS’s references, I was responding to josh’s comment. Although I should have led with a patent has to issue for it to be found invalid. Then, it’s most likely to be found invalid based upon references that were not considered by the Examiner.
Justice Breyer’s comment that in today’s world, perhaps a “worse disaster for the country is to have protection given to things that don’t deserve it,” may have been intended to highlight the one-sided analysis in the AIPLA Amicus brief (as he mentioned it by name) which (properly) addressed only the harm of erroneously invalidating perfectly good patents.
However, like Microsoft’s argument, Justice Breyer’s comment misses the fundamental principles for setting a standard for the burden of proof – the relative imbalance of the countervailing risks to the litigants owing to errors of both types. As Justice Harlan explained in Winship, it is the relative risks to the litigants that controls the standard of proof because it affects the frequency of the two types of errors, which aggregate to form the social harms. It is remarkable that Justice Breyer appears to have reached a conclusion without any basis that errors of upholding bad patents are worse (more costly) than errors of invalidating a patent for an otherwise valid and patentable invention.
During oral argument, Mr. Waxman explained that it is the asymmetry of the countervailing risks of error to the litigants that matters. Unlike infringement determinations, where the risks to the litigants are symmetric (producing the preponderance of evidence standard), patent invalidity proceedings entail highly asymmetric risks to litigants. The Asymmetry ratio can be 100:1 or even 1000:1 because an erroneous invalidation of an otherwise perfectly good patent results in the patentee’s inability to recover not only from the accused infringer but obtain license income from 100 or 1000 licensees. Justice Breyer will not find such analysis in the AIPLA brief or the i4i brief. I hope he and his colleagues read my Amicus Brief (available at link to bit.ly ) and learn about the Court precedents in setting the standard of proof based on the countervailing risks to the litigants and its application in patent law. I show that the heightened standard of proof and the presumption of validity does not arise due to Section 282 but rather that it is the other way around – the presumption is a corollary of a heightened standard that independently and unconditionally exists due to the highly asymmetric countervailing risks of adjudication errors.